Yen Recovers From Lows, As Markets Continue To Correct

Today, the currency markets are extending short-term corrective moves, with the Yen strengthening modestly, followed by the Swiss Franc. The weakest currencies are the Canadian and British dollars, followed by the US dollar. The Loonie will seek guidance from the BoC’s policy decision. In the meantime, larger markets will monitor changes in overall risk sentiment. European indices are marginally lower, but US futures indicate a strong start.

Following the previous session’s negative swing, USD/JPY has remained sideways. The pair remained stuck in a tight trading range. USD/JPY is currently trading at 113.81, down 0.01 percent for the day. The yield on the US benchmark 10-year T bond fell to 1.53 percent, the lowest level since July, indicating that the greenback is in high demand. Rising inflation, supply chain concerns, and dismal statistics continued to worry investors.

Following disappointing economic reports, the dollar has remained stable near 93.80. In September, new durable goods orders in the United States declined less than expected. August’s increase was reduced down from 1.8 percent to 1.3 percent.

The Japanese yen, on the other hand, is struggling to find demand ahead of the Bank of Japan’s (BoJ) policy update. At its meeting on Thursday, the Bank of Japan is anticipated to maintain its enormous stimulus package while cutting inflation predictions for this year. S&P 500 Futures are currently trading at 4,550.50, up 0.13 percent so far. Traders are currently watching Japan Retail Sales, the Bank of Japan’s Interest Rate Decision, and the US GDP Growth Rate to evaluate market mood.

The Yen Is Still off Its Lows

The USD/JPY surged from weekly lows of 113.37 to 113.83, marking its highest level since the start of the European session, but then fell back to around 113.65.

The USD/JPY fell to 113.37 after the release of the Durable Goods Orders report, its lowest level since October. The Bank of Canada’s decision to terminate its quantitative easing program increased US yields and caused the USD/JPY to soar to 113.83 minutes later.

The US yield has reverted to the downside in the last hour. After a brief comeback to 1.59 percent, the US 10-year yield is down at 1.56 percent, down more than 3% on the day. The USD/JPY is under pressure due to the recovery in Treasuries.